Businesses get 2% of sales tax back
LAFAYETTE — The Lafayette City-Parish Council is considering doing away with a rebate that helps retailers cover the cost of collecting sales tax — a move widely panned by the business community.
The council voted 6-3 on Tuesday to move the proposal forward, which is scheduled to come up for a final vote on Dec. 17.
“The businesses should not be awarded a bonus for doing what is required by law,” said Councilman Kevin Naquin, a vocal supporter of ending the rebate.
The rebate, which has been in place since the 1960s, allows businesses to keep 2 percent of the total collections for city-parish sales taxes to help cover administrative expenses related to accounting for the tax and paying it.
The impact on businesses would vary widely, depending on sales.
For a business in the city of Lafayette with $1 million in annual taxable sales, the annual rebate would be $400.
Ending the rebate would bring about $1.5 million in new revenue each year to city-parish coffers, according to figures from city-parish government.
“Over a 10-year period, we are giving $15 million away,” Kevin Naquin said.
Several local business associations, including the Greater Lafayette Chamber of Commerce, oppose ending the rebate.
“This community made a commitment to retailers over 50 years ago to compensate them for what they do,” said Joseph Zanco, chairman of the chamber’s Public Policy Committee.
Zanco said the proposed end to the rebate “is seen largely as an anti-business measure.”
Kevin Naquin said the Lafayette Parish School Board, Scott, Carencro and Youngsville have all ended vendor rebates for their sales taxes.
Greater Lafayette Chamber of Commerce President and CEO Jason El Koubi said that on a state and national scale, vendor rebates for expenses related to tax collections are still the norm, and ending the rebate locally could put Lafayette business owners at a competitive disadvantage.
“The vast majority of other parishes and other municipalities in our state provide vendor’s compensation,” he said.
El Koubi said he supports exploring options for funding city-parish government but believes striking the tax rebate would send the wrong message to the business community.
Councilmen Kevin Naquin, Don Bertrand, Jay Castille, Keith Patin, Brandon Shelvin and Kenneth Boudreaux voted to move the proposal forward for a final vote on Dec. 17.
Councilmen Andy Naquin, William Theriot and Jared Bellard voted to kill the proposal.
Even though the proposal to end vendor’s compensation received six votes Tuesday, both Shelvin and Boudreaux said they had not made up their mind whether to ultimately support the measure when it comes up for a final vote.
“We need to look at this thing slow and close and make sure we do right with it,” Boudreaux said.
The council has considered ending the rebate before, but the measure has never gained traction.
If approved, the vendor’s compensation would be phased out over two years.
“We are giving Lafayette businesses time to adjust,” Councilman Kevin Naquin said.
In other business, the council voted to allow the Lafayette Parish School Board to use a portion of city-parish government’s Foster Park in Youngsville for a playground for Green T. Lindon Elementary School, which is next to the park.
More space is needed because the School Board plans to expand the crowded elementary school.